Buying / Selling Real Estate

Property Value Tax Reassessment

Under Proposition 13, real property is reassessed for property tax purposes only when a change in ownership occurs or when new construction is completed.  "New construction" is any improvement outside of normal maintenance. It does not mean only construction of a "brand new" building.

Non-Permitted or Non-Conforming Rooms, Additions, or Alterations

Buyers are advised to be cautious about properties that have been remodeled with new additions or significant alterations.  If these additions and alterations were made without permits they may be non-conforming and, if discovered by code enforcement officials, removed at the owners cost.  As such, before purchasing a home a buyer is encouraged to compare the actual building to the public records pertaining to the building and ensure that any additions or changes made to the building were done so according to building code and with the appropriate permits. 

Megans Law

Real estate sales contracts for property with 1-4 units as well as all rental or lease agreements are required to reference "Megan's Law".  In 1996, the California State Legislation required sex offenders to register with local and state agencies and require those agencies to release the available information about these sex offenders in an effort to create awareness and protect the public.  What does this mean? If you are selling a property, you have to disclose specific language in the purchase contract regarding the availability of the public information on any sex offenders. If you are buying a property (or renting or leasing an apartment), the seller or landlord should disclose to you in your agreement  that Megan's Law exists and that the information is available to you at a local government agency.  It is NOT their responsibility to inform you of any specific person that may or may not be residing in your neighborhood. They only have to inform you about the rule and state where you can find the specific information at your local government agency.

Liquidated Damages

Liquidated damage clauses exist in some contracts. If a buyer backs out of a deal even though contingencies were satisfied, the seller keeps some or all of the good faith money as liquidated damages. In transactions of higher risk, liquidated damages can serve as a hedge for the buyer against being sued for breach of contract.  The seller would have agreed to keeping some or all of the good faith deposit as their compensation in such a case. 

Good Faith Deposit

If a buyer makes an offer and the seller agrees to it, the buyer will make a good faith deposit of a few hundred to a few thousand dollars depending on the value of the home. In the simplest of terms, good faith money is the buyer saying "I'm serious so here is some money. If I don't follow up and proceed with this deal you -the seller- can keep the good faith money.". By accepting the good faith money, the seller is making a commitment to work with the buyer and to halt any further attempts to sell the property.  The seller may ask for more good faith money if the real estate market favors the seller. Conversely the buyer may offer only a token amount if the market favors the buyer.